Achieving personal financial objectives generally includes a long-term relationship with a trusted and knowledgeable financial advisor who can assist with periodic financial planning. A financial advisor who is able to develop these types of relationships and meet a client's need for periodic financial planning thereby facilitates client retention. Inaccurate consumer impressions that financial planning is a once in a lifetime event should be mitigated in order to facilitate advisor-client relationships and accurately assess the client's current financial position as well as their future direction. An initial evaluation of a client's financial situation, followed by periodic reevaluation in light of changes in asset performance, market conditions, and client objectives, is important for the realization of the client's financial goals. Since initiating, building, and maintaining long-term advisory relationships with a client aids in becoming a successful advisor, financial planners are constantly searching for methods to foster this relationship in an effort to better serve clients and remain competitive.
Generally, the financial advice and information that is provided in a financial plan is becoming standardized as a result of the standards set forth by the Certified Financial Planning College and the adoption of those standards by the International Organization of Standards (ISO). Therefore, minimum levels of quality regarding the financial advice provided to clients are required to meet these standards and satisfy consumer needs. However, consumers of financial advice are becoming increasingly sophisticated and are, therefore, demanding more complete services from financial service companies and advisors. For example, in order for a financial advisor to prepare a comprehensive, integrated, financial plan for a client, it is useful to be able to illustrate to the client the effects of future uncertainty on that financial plan. A financial planner's ability to model the effects of unpredictable future events enhances the value of a financial plan to a client because it allows the client to prepare for those events in proportion to the likelihood of their eventuality.
Conventional financial advice applications generally ask the financial planner to input assumed rates of return (or a return rate that is calculated based upon the client's current investment portfolio) for the client's current and proposed investment portfolio without determining the type of strategy that might be best suited to the particular client's financial situation and objectives. In addition, a myriad of commercially available products target each of the three main financial categories, that is, cash, equity, and bonds, as well as the various subcategories of each. For example, equity funds can be categorized as domestic or international, large cap stock, small cap stock, etc. While it is difficult to keep abreast of all the mutual funds that a particular company may offer, financial planners are assisted in the selection of financial investment products by a variety of tools that can access and store the product offerings of at least a particular company in a database.
These conventional applications are unsatisfactory in several regards. Existing model portfolio engines do not adequately blend short-term and long-term needs to arrive at a client's recommended portfolio. Financial products capable of meeting the recommended portfolio are typically selected outside of the application. Conventional applications often fail to provide a current list of available products within the application that are directed to specific consumer needs. Furthermore, these applications do not offer an adequate proposed investment strategy for the client. Current financial planning tools usually provide deterministic illustrations (which may foster a false sense of certainty). Moreover, existing financial applications often provide stochastic modeling only of retirement goals and do not normally present stochastic models addressing lifetime cash flow, disability, long-term care, and death, for example. Finally, current applications do not offer personalized quality financial advice that is consistent with industry standards and tailored to the client's individualized needs.
In view of the foregoing, there is a need for financial planning systems and methods which overcome the shortcomings of conventional computer implemented financial planning applications.